Mining export, industrial production and economic growth: A cointegration and causality analysis for India

• We study the relationship between mineral export and economic growth in India.
• Cointegration and causality among mineral export, NNP and IIP for India examined.
• Cointegration result holds for the presence of long run equilibrium relationship.
• Existence of both short run and long run causality from NNP to mineral export.

This paper investigates the relationship among mining export, industrial production, and economic growth in India using annual time series data from 1981 to 2010. It is based on the secondary sources of data extracted from Reserve Bank of India database. The multivariate cointegration technique has been employed to see the long run equilibrium relationship among variables. Further, Granger causality based on vector error correction model (VECM) has been adopted to see both short run and long run causality among the variables. The cointegration results confirm that mineral exports, industrial production and economic growth are cointegrated, indicating an existence of long run equilibrium relationship among variables. Similarly, the VECM Granger causality result holds that there is a long-run Granger causality relationship running from economic growth and industrial production to the mineral export of India.